Friday, November 2, 2012

Hurricane Sandy Freezes Capital Markets

Jeanne Peck
Chicago, IL - - Hurricane Sandy was no lady, or a pleasant trick-or-treat surprise. The massive devastation froze the capital markets this week, with the full effects still unknown.

Yet the mid-fall funding season is very active, mostly due to the resurgence of conduit lenders in the marketplace; all capital sources are forced into competitive
bidding due to this CMBS "re-emergence". Both the November Presidential
Election and Fed policy action reinforcing low rates until 2015 have
resulted in borrowers having less urgency to refinance by year end.  The
state of realty capital markets is summarized as follows:

*    Record-low rates:  While treasuries climbed this past month, spreads
tightened by as much as 25 to 50 basis points, depending upon the type of
lender, leverage, project quality, etc.  Ten-year, fixed-rate permanent
loans are priced regularly below 4% for lower leverage transactions, while
five-year loans approach unheard levels near the 2%-mark.  At the end, rates are only slightly higher than a month ago.

*    Dropping floors: - A clear result of dropping rates are lower [or
no] floors.  Lenders chase yields downward, eliminating floors on the way
down.  The 4%-floor was commonplace with life companies, while CMBS lenders clung to 5% for much of the year- but no more!  Competitive lenders are dropping floors, in light of fierce competition from all fronts: life companies, banks, conduit and agencies.

*    New supply:  More development deals brewing, and not just
multifamily.  However, development is very targeted - mostly underserved and urban infill sites.  In particular, multifamily with mixed-use components (parking, retail and office) grabs the spotlight due to the readily available financing for this sector.   New-construction office, retail and industrial deals are financeable, but with substantial equity or based upon strong credit-tenant profiles.

*    Smaller loans:  As the picking gets slim for larger, quality assets lenders are moving down the dollar-size scale.  Loans of $5 to $20 million
gain more traction, particularly with conduit lenders.  During the past few years, much of this funding turf remained in smaller lifeco and bank territory.

*    Equity pricing:  Equity pricing closely follows declining debt costs.  Generally speaking, Coastal Core properties are targeting overall yields in the 8%-10% range for multifamily, office, retail and industrial properties.  Value-add pricing is within the 10%-15% range, including a wider spectrum of assets such as senior, self-storage, health-care and lower
grade conventional properties.  Last but not least, Opportunity funds target
appreciation vs. cash flow, taking on the remainder of the commercial real
estate investment base with yields of 15% to 20% or more.

Ms. Jeanne Peck of The Real Estate Capital Institute suggests, "Fierce competition among lenders is quickly reducing the risk profile differential between various types of properties".  She further notes, "The borrower is the real winner, as lenders finally realize lower rates are here to stay for a while."

The Real Estate Capital Institute(r) is a volunteer-based research organization that tracks realty rates data for debt and equity yields.  The Institute posts daily and historical benchmark rates including treasuries,
bank prime and LIBOR.  Furthermore, call the Real Estate Capital RateLine at 7RE-CAPITAL (773-227-4825) for hourly rate updates.


The   Real Estate Capital Institute(r)
3517 West Arthington Street
Chicago, Illinois USA 60624
Contact: Jeanne Peck, Executive Director

Rock Ventures to Break Ground on 33,000 SF Specialty Retail Development with 10-Story Parking Garage in Downtown Detroit

Dan Gilbert
DETROIT, MI /PRNewswire/ -- Rock Ventures LLC announced today it will build 33,000 square feet of ground floor retail space and a 1,300 space parking garage in downtown Detroit's Central Business District.

Construction on the 535,000 square-foot Z-shaped retail and parking development will begin in November 2012, and is expected to be completed by December 2013.

The structure will zigzag from the corner of Broadway and East Grand River to the corner of Library and Gratiot, occupying what is currently a surface parking lot.  The parking/retail development will be a distinctive structure utilizing color, glass, and original artwork.

Rock Ventures is developing the property to help alleviate the area's parking shortage in and around downtown Detroit's Central Business District, and just as important, bring more unique retail and dining options to the area's fast growing tech and creative corridor and employee base, said Dan Gilbert, Founder and Chairman of Rock Ventures and Quicken Loans.

For a complete copy of the company’s news release, please contact:

Paula Silver,

Colliers International Completes $27.5 Million Sale of Industrial Property in La Mirada, CA

La Mirada, CA Industrial Building, 16400 Knott Ave.
 LA MIRADA, CA -- Colliers International, the third largest global real estate services organization, has completed the $27.5 million sale of a 278,000-square-foot industrial building located at 16400 Knott Ave. in La Mirada, Calif. 

Clyde Stauff, SIOR, of Colliers International represented the seller, La Mirada Realty, LLC from Dalton, GA. Stauff also represented the buyer, Atlanta-based Invesco Advisors.

Clyde Stauff

The property was formerly occupied by Shaw Industries who vacated and consolidated operations in their existing Cypress, Calif. warehouse.

Invesco will conduct major upgrades to the property including full ESFR sprinkler conversion, office refurbishment and upgrade, landscaping upgrade, interior and exterior paint and new low energy warehouse lighting.

The building features 40’ clear height, 36 dock-high doors, three grade-level doors, and a large truck court. 

Ross Fippinger
“The Knott Avenue building sale underscores the demand for larger Class A industrial assets in the mid counties market,” said Stauff. “Additionally, the prime La Mirada location includes high profile neighbors, such as Makita, US Foods, and Amada.”

Stauff along with Ross Fippinger are also responsible for leasing of the property.


Darcie Giacchetto
Spaulding Thompson & Associates

Michele Noonan Joins Taylor & Mathis of Florida

Michelle Noonan
SUNRISE, FL, 2012  -- Michele Noonan joined Taylor & Mathis of Florida’s leasing team in Broward County.  Beginning November 1st Michele will work with Director of Leasing Donna Korn in leasing a 1.2 million square foot office portfolio.

 “Michele’s ability to leverage her expertise has allowed her to turn properties with high vacancy rates into valuable real estate assets for her clients.  We are excited to have her on the Taylor & Mathis team,” stated Korn.

 Taylor & Mathis recently added four buildings to their Broward County leasing portfolio.  The firm was selected by The Brookdale Group to lease their 344,300 square foot, four building office portfolio in Sawgrass International Corporate Park.

The Broward County leasing team portfolio includes:

Donna Korn
    Sawgrass Plaza, International Place I, Corporate Centre I & III on behalf of The Brookdale Group
    Corporate Center II, Sunrise on behalf of USB Realty Investors
    Lakeside Plaza, Fort Lauderdale on behalf of Delma Realty Services III, LL
    Miramar Centre I & III , Miramar on behalf of MetLife
    Huntington Centre I & II, Miramar on behalf of MetLife
    Venture Corporate Center I, II & III, Hollywood on behalf of MetLife

Noonan who specializes in landlord representation brings over 20 years of commercial real estate experience to the job.  Throughout her career she has represented over 1.5 million square feet of office & retail space.   Her experience includes leasing, sales, development and property management.